The vertical long-run Phillips curve
a. indicates the permanent unemployment rate
b. indicates the unemployment rate at the optimal level of GDP
c. is only one of several vertical curves that together are called interest rate targets
d. indicates the economy's natural rate of unemployment
e. is more socially desirable than a horizontal Phillips curve would be
D
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If you believe that velocity is constant and that the aggregate supply curve is vertical, then the quantity theory of money would predict that a doubling of the money supply would cause a doubling of
A. nominal output and real output. B. nominal output and no change in real output. C. real output and no change in nominal output. D. the price level and real output.
A Swiss watch company advertises its history of superior craftsmanship. The company thinks that this would
a. Make the demand for the product less elastic b. Make the customers less sensitive to the price c. Assist them with differentiating their product d. All of the above
Efforts to raise money for local charities illustrate which of the following?
a. Using social pressure to produce a public benefit b. Relying on society to develop positive externalities c. Creating nonexcludable but rivalrous resources d. Distributing private benefits throughout society
An extreme case in which a percentage change in price, no matter how large, results in zero change in quantity is called:
a. perfect inelasticity. b. perfect elasticity. c. strong elasticity. d. weak elasticity.